4 ugly truths about buying a home

Alex Segre / FlickrVision

Alex Segre / FlickrVision

Caroline BantonGOBankingRates.com

Buying a home is an exciting venture but it also comes with risk and expense. Many homeowners underestimate the extra cost of maintenance and repairs or the labor required to keep a home and its surrounding property in tiptop shape.

Here are four ugly truths about buying a house, as well as some expert advice that can help you make a great home purchase.

Maintenance and repairs can cause monthly costs to spike

Many buyers don't factor in maintenance costs when they buy a home. Such expenses can increase your monthly cash outlay substantially. Meanwhile, a property can deteriorate over time if an owner cannot afford the maintenance costs.

"The buyer should never stretch themselves so thin that the maintenance costs are more than they can handle," said Emily Restifo, a New Canaan, Conn.-based realtor with Houlihan Lawrence. "Better to buy a more modest property and maintain it to the highest standard."

Keeping up a house to a high standard is a long-term investment. "At every price range, when it comes time to sell, it is the well-maintained property that sells first," Restifo said. "Ultimately, the repairs will have to be done at some point anyway."

Homeowners always end up paying for maintenance, Restifo said. Sometimes it's while they're living there and enjoying the home, and sometimes it's through a lower sale price and costly repairs when it's time to sell.

The seller's agent will not necessarily be your advocate

When buying a house, you should have your own representation. Using the seller's agent is not recommended.

"Many buyers have come to me and said 'I will get a better deal if I use the listing agent,' and this is 100 percent false," said David Feldberg, Newport Beach, Calif.-based broker-owner of Coastal Real Estate Group. According to Feldberg, it is legal in California for an agent to represent both sides _ buyer and seller _ of a transaction. However, "double-ending," as it is commonly called, often leads to lawsuits.

"A buyer's agent should be trying to get the best deal for their client, and the seller's agent the highest price for their client," Feldberg said. "It's near impossible to accomplish both."

Avoid the temptation to cut corners in an attempt to save money. Remember, when buying a home, keep your eyes wide open so you don't fall for tricks that could cost you in the long run.

A buyer's agent can be just as bad

Not every agent will go the extra mile to be your best advocate. "If your real estate agent glosses over faults or fails to discuss with you how the home you are considering fits with your needs and goals, consider if they are truly advocating for you," said Michael Schaffer, Greenwood Village, Colo.-based broker associate with LIV Sotheby's International Realty.

Roger Ma, a New York-based certified financial planner and founder of the financial planning firm Lifelaidout, said most real estate agents are not personal finance experts. Your real estate agent probably has no idea whether buying a home is a good financial decision for you. "They just know, based on your financials, whether you can afford to buy a home," he said.

Nancy Brook, an agent with Remax in Billings, Mont., said some agents are more concerned with earning a commission than truly serving their buyers. For example, a disreputable agent might recommend an inspector who is not thorough so that issues do not come up that might derail a sale.

"If inspection items do come up, the disreputable agent can also minimize the seriousness of what the inspector uncovers," Brook said. "First-time homebuyers, especially, don't know what items are of concern, so they often rely on their agent for guidance."

Expect overages if you intend to remodel

Older houses often need remodeling, and buyers might rely on a budget that does not account for overages. "Many clients will walk in and see a dated kitchen and bath and then think I can do it for 'X' amount, as they have seen it on TV," said Feldberg. "But the reality is (that) when you start opening walls and doing large projects, there are always unexpected problems."

Feldberg suggested padding a budget by 25 percent for a sizable remodel on an older house. Creating a reserve account before you move in is also a good idea to make sure you've got cash on hand for

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maintenance and repairs.

Restifo said you should prepare for the reality that there are always going to be things that go wrong _ whether it's the washer, dryer, air conditioning or water heater. "It's almost certain to be something, so just don't be surprised," Restifo said.

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